AKIO MORITA'S AMERICAN DREAM

by Naoyuki Agawa

If you asked who, among those Japanese active after World War II, is best known among Americans, until four or five years ago the name Akio Morita would undoubtedly have come up. Of course, there are other Japanese who are well known in America: actors, musicians, and athletes such as Toshiro Mifune, Seiji Ozawa and, recently, Hideo Nomo. However, these individuals, who had special abilities and became well known in America because of these abilities, were not able to represent Japan in a broader sense. If you were to try to think of someone whose name is synonymous with Japan, in the sense that Margaret Thatcher's name is synonymous with England and Nelson Mandela's with South Africa, it would be hard to come up with anybody other than the late Emperor Showa.

Among the political and business leaders of Japan, who tend to be criticized for not showing their personalities, Morita's fame in America stands out. Not only the elite of New York and Washington who have contact with Japan, but also many ordinary people knew Morita's name and face.

I first met Morita in the fall of 1975, the year I went to study at Georgetown University. Masao, Morita's second son, was also studying at Georgetown and invited a number of friends to have dinner with him and his father, who was visiting Washington at the time. Having never met such a famous person before, I was nervous when I first shook hands with Morita at the Watergate Hotel, where he was staying.

We then proceeded to the French restaurant, La Bagatelle, and while we were looking over the menu, a man came over hoping to sell us roses. Upon seeing Morita, he exclaimed, "Ah! Mr. Morita! You're the famous Morita!" When Morita asked the man how he recognized him, the man answered, "Because you are very well known. I've seen your face on the covers of magazines." Morita, in good humor, bought many flowers and the man walked away very happy. I wondered if the restaurant had staged the encounter, but Morita seemed used to such things and did not appear the least bit surprised.

In the latter half of the 1980s, Morita appeared in American Express commercials. At the start of one of the commercials, Morita would ask in English, "do you know me?" Of course, it was a rhetorical question, as the implication was that everybody knew himﾑhe was the famous Morita. The gist of the commercial was, "even I carry an American Express card because of the credit and status it offers, so you should, too." I know of no other Japanese business or political leader, before or since, with the audacity to appear in such American commercials.

Of course, Morita is so well known in America because, together with his partner, Masaru Ibuka, he built Sony into a world-class company.

Americans like people who can make things happen through their own efforts and perseverance. People are praised in America not because of their family lineage or connections, but because they make the most of opportunities that arise and work hard to achieve success. Thus, Americans would be drawn to the story of a man who turned an unknown small-town factory into a universally acclaimed enterprise.

But this, in itself, does not adequately explain Morita's fame. Compared to Ibuka who was seen as a reserved engineer, Morita had an indescribable flair. His attitude was both refined and cheerful. He did not seem the slightest bit out of place standing on a New York street corner and his curious eyes were always in motion. As soon he thought of something or had an idea, he would immediately call a subordinate or a friend, regardless of the hour.

He liked to work and he liked to play, but above all, he liked to be on the move. In this way, the dynamic Morita seemed to share something with others who succeed in America. Not only did he have great ability, but he always used that ability to its fullest, radiating energy to the people around him in the process. The message that he always seemed to convey to others was, "I am busy, full of vigor, and making loads of money. How about you?"

To many Americans, who think of the Japanese as quiet, taciturn, expressionless, and always with vague smiles on their faces, Morita made them realize that there was, in Japan, a man just like them with whom they could identify. I think that therein lay the secret of this man's success.

There were many who thought Morita was just like an American. The current president of Sony, Nobuyuki Idei, once said, "Morita seemed less like a Japanese than an American from the East Coast. He had the air of a New York businessman. [. . .] One would think he might have been an American in a previous lifetime." Was this American-like nature of Morita something he was born with, or did he acquire it after going to America following the end of World War II? Wanting to find out, I recently reread Morita's autobiographical book, MADE IN JAPAN: Akio Morita and Sony.

MADE IN JAPAN

The book, Made in Japan, was published in 1986 and compiled by Asahi Shimbun reporter, Mitsuko Shimomura, and TIME Tokyo Bureau Chief, Edwin Reingold, based on remarks that Morita had made in interviews they had conducted. Shimomura conducted about 70 percent of the interviews in Japanese, the other 30 percent, by Reingold in English. The book was first published in English and distributed in the United States. The Japanese edition was a translation of the English, edited by Shimomura. The decision to publish the book in English was based on Morita's philosophy that doing so would facilitate its reaching the world market.

The first half of the book consists of Morita's remarks concerning his own personal background and the founding of Sony.

The second half presents Morita's thoughts on management, technology, competition and international trade, as well as differences between Japanese and American corporate cultures. Even though Morita emphasized the second half of the book, if anything, the first half is more interesting. No matter how many times repeated, the story of Sony's founding has the mysterious and ageless power to excite and inspire. In contrast, the second half of the book is unsettling. Discussions ramble on, jumping from one place to another, and lack depth. Perhaps this was unavoidable given the way the book was put together. I was working at Sony headquarters at the time, and every time something came up concerning American law, I was asked to comment. A female assistant, who was responsible for the project, kept me up to date on its progress.

To use a baseball analogy, one could say that Morita, like Shigeo Nagashima, was a man of intuitive ability. He kept scoring hits, but not because he had an underlying theory or strategy. Instead, Morita kept drawing ideas from a seemingly inexhaustible spring, which he would pass onto Shimomura and Reingold. However, because he was so busy, interviews would often be broken off midway so that they ended up fragmentary. I can sympathize with the two editors faced with the task of trying to combine Morita's scattered comments into a single, consistent prose.

As Shimomura states in her postscript, Morita put surprising amounts of time and energy into getting the book finished. However, upon seeing the finished product, he apparently expressed dissatisfaction, finding that it did not quite say what he had wanted it to say. In the end, no matter how excellent the writers, unless one writes one's own book, there is no way it can say exactly what one wishes it to. I shared this opinion of mine with several people who knew Morita, but he was simply not the kind of person who could sit down and take the time to write his thoughts down on a piece of paper. In fact, had he done that, he would not have been able to accomplish what he did. Morita's real masterpiece was the company Sony, not this or that bit of writing.

Morita first went to America after the war. Naturally, he did not have a chance to go before the war, and America was the enemy to be defeated after 1941. Moreover, like many Japanese of his generation, Morita, born in 1921, did not learn adequate English. Until he reached adulthood, America was a far-off land of which he had only vague ideas. However, he did not harbor the strong antipathy towards America like those of a slightly younger generation. Or if he did, he did not show it.

It is interesting that the first American Morita came into contact with after the war, other than members of the Occupation forces whom he encountered through business, was a lawyer.

The first major products Sony made were tape recorders, which Sony called "tapecorders." Sony bought several related patents from other companies, and filed a lawsuit against a certain company that was importing similar products from the United States without obtaining a license from Sony. The court subsequently granted Sony's request for an injunction on the importation of these competing products. In response, the manufacturer of the imported tape recorders claimed it had been licensed to use the patent from a company called Armour Research. Armour then sent a lawyer named Donald Simpson to Japan to contest the validity of Sony's patents.

As Morita related, "It was the first time I had ever met an American lawyer and I was quite impressed with how tough a competitor he was." The dispute continued for three years at the end of which, in 1954, Armour Research accepted Sony's arguments and a settlement was made. The details of that litigation cannot be adequately understood simply from what is written in Made in Japan, but it can be said that Sony fought well against its opponent's American lawyer. This marked the start of the numerous disputes between Japanese and American companies over intellectual property rights. What is interesting is that after the case was over, Morita hired Simpson, the attorney for Armour, as a counsel for Sony. Morita later became quite critical of America's litigious society, but among Japanese businessmen he was probably the most skilled in using lawyers. And it all started with that first battle against an American lawyer.

FIRST VISIT TO AMERICA AT AGE 31

Morita's first visit to America was in August 1953, shortly before the settlement with Armour was reached. The main purpose of this trip was to finalize an agreement with Western Electric Company granting to Sony a license to use patents on transistors. Ibuka had laid the groundwork for the agreement on a trip to the U.S. the previous year. Obtaining that license enabled Sony to manufacture the transistor radio, which together with the tape recorder, would become virtually synonymous with Sony.

Morita was excited when he boarded the Pan American Airways Boeing Strattcruiser at Haneda Airport with a shoulder bag on his shoulder and a small suitcase in his hand. The Strattcruiser was a 4-propellered B-29 bomber modified for use as a passenger aircraft. Today, it seems hard to believe that Morita would get excited about a trip overseas, but everything has its beginning. Morita was 31.

Morita was overwhelmed on that first visit. "Everything was so big, the distances were so great, the open spaces so vast, the regions so different. I thought it would be impossible to sell our products there. The place just overwhelmed me. The economy was booming, and the country seemed to have everything."

Someone once said that everyone falls for the first country they visit. If so, then Morita must have fallen in love with 1950s America. I once heard from a close friend of Morita's that when Morita visits America, he enjoys eating at American-style family restaurants such as Howard Johnson's more than at high-class French restaurants.

Apparently, when he started doing business in America, he used to stop at Howard Johnson's at turnpike rest areas and consume large amounts of American food. These restaurants do not necessarily offer the best food, but they still retain the atmosphere of 1950s America, an atmosphere without such recent novelties as sushi and Vietnamese food. Morita was perhaps attracted to that.

After that first trip, Morita flew frequently to America, at which time he became immersed in sales of the transistor radio, which was put on the market in 1955. Yes, there was a time when the great Morita himself was the door-to-door salesman, visiting New York retail stores one by one to sell radios.

When I was at Sony, I went home from work one day with a department head who had worked for Morita as his secretary for many years. In the car, the department chief asked, "you young people think of Sony as a big company, but do you know what Ibuka and Morita's dream was?" I was pressed for a reply. "They dreamed of one day owning a corporate headquarters with elevators!" It wasn't just Ibuka and Morita. For a while after the war, perhaps all Japanese dreamt dreams of making it all the way while dealing with giant America.

As a latecomer to Japan's corporate circle, Sony's strategy first to establish its brand name in the American market and build on that to improve its position in the Japanese market proved extremely effective.

It was Morita who thought of this strategy, carried it out himself, and made it a success.

There is a legendary story about a well-known company called Bulova Inc. that offered to place a large order of 100,000 units of transistor radios on the condition that the Bulova name be put on the radios. When Morita refused the offer and the company lost the sale, the purchasing officer argued that his company name was a famous brand name that had taken over 50 years to establish, while nobody in America had ever heard of the Sony brand. Morita hurled defiance: "50 years from now I promise you that our name will be just as famous as your company's is today." It took Sony less than 10 years, much less 50, to overtake Bulova.

Sony's success in the American market was due, no doubt, to the company's technological strength coupled with Morita's business genius, which was just as much a factor. However, one must not overlook the contributions of many kind people who taught Morita, a newcomer to America, how to do business there. For example, there was Adolph Gross, a representative for a certain manufacturer, who had his own company on Broadway. Although he was already an agent for a certain manufacturer, he agreed to serve also as Sony's agent and went so far as to let Morita have a desk in his office.

Gross was 20 years older than Morita and went out of his way to help him in ways that stretched beyond business. From the day they were first introduced, Gross wanted to know everything about Morita, his company and his business philosophy. He taught Morita about American business customs and gave him practical advice in doing business in America, sketching out characteristics of various stores.

One day, Gross bought tickets to the musical, My Fair Lady, and invited Morita to join him. After working until late, the two went to the theater together. Morita was excited about seeing his first musical, but when the overture started, Gross said, "Good night, Akio" and proceeded to sleep through the performance, which he had paid $100 to attend.

Gross' lawyer, Edward Rosiny, taught Morita about American business law and how to write contracts. Morita placed a great deal of trust in Rossini, and in a short article in the Japanese legal magazine, Jurist titled "Legal Strategy as Seen by a CEO," Morita referred to Rosiny as his "tutor in legal matters."

Once, when Morita broke off relations with a distributor, which then threatened to sue Sony for the unheard of sum of $1,000,000 in damages, Rosiny told him, "leave this one to me, I'll bargain them down." As Morita watched anxiously, day by day, the amount demanded went down. Morita was ready to settle, but Rosiny would not give up. "Give me one more day,ﾓ he said, ﾒI'll get it down to $100,000."

The next day, a settlement was reached for $75,000. Morita asked Rosiny how much his fee was and he said, "$25,000. I'll take my fee out of their money."

Morita was impressed by Rosiny's negotiation skills and shrewdness, and Rosiny also took a liking to Morita and the two eventually became as close as brothers. Many years later, Sony fought a copyright case involving Betamax all the way to the United States Supreme Court and won. After the case was over, Morita visited Rosiny's grave and placed an issue of The New York Times, with its front-page headline reporting Sony's victory, there beside it in the snow.

SETTLING DOWN ON FIFTH AVENUE

While Sony may have represented a major business opportunity for those that helped Morita, the charm of the young businessman who had come all the way from Japan must have been part of the reason of their kindnesses that went beyond business. Interestingly, many of these individuals were Jews, who were seasoned New York businessmen.

Even in the late 1970s when I joined Sony, a large share of the consumer electronics business in New York was owned by Jews. They did not necessarily occupy high places in society. But as some of the Jewish immigrants from Eastern Europe and their children had initially suffered discrimination in America, they tended to be kind to those Japanese businessmen who came to the U.S. after them.

Twenty years after arriving in New York, Morita had made many acquaintances among America's upper crust and was on a first-name basis with such magnates as Rockefeller and Kissinger. What normally takes at least two generations to achieve in American society, Morita had accomplished in a mere quarter-century, and he did so entirely on his own.

After Morita severed a relationship with the distributor with Rosiny's assistance, Sony found itself in the position of having to buy back 30,000 radios that remained in the store inventory. In the ledger, it may be just another number, but the fact is, it's a lot of radios.

In the bitter cold of New York in February 1960, Morita and four other men changed into work clothes, split up into several trucks, and transported the radios to a warehouse, starting work one morning and working through the night until 4 a.m. the following day.

When they went to the warehouse one last time to conduct a final check, a security guard arrived and arrested all of them. He would not believe that the men he had just arrested were, in fact, the management of the company that owned the warehouse and it was only after he watched one of them open the safe in the office that they were finally released.

Through that experience, Morita and the others were drawn even closer together.

Soon after joining Sony, I remember having to work until late one night in one of the warehouses checking a mountain of bills of lading for color television sets, one by one, in preparation for a U.S. government investigation concerning a dumping allegation. When I think that Morita went through a similar experience, it makes me feel somewhat closer to him.

Another person who taught Morita about American business was a Hawaii-born Japanese-American named Yoshinobu "Doc" Kagawa, who had served in Japan as a lawyer for the Occupation forces and remained there to practice law after the Occupation ended. After becoming an advisor for Sony, he and Morita often traveled together to America.

When Morita went to New York, he stayed in cheap hotels and ate his meals at automats, where he could spend some time alone, not having to talk to anyone. His English was not very good at the time and he did not have very much money.

However, Kagawa told him that he should live better to project an image of success, asserting his own pride and his company's dignity and prestige. Kagawa told him that it was better to stay in the cheapest room of the best hotel than in the best room of the cheapest hotel. He also suggested that he eat in good restaurants in order to learn the differences in the tastes and quality of service among restaurants. Throughout these early years, Morita faithfully followed Kagawa's advice.

Eventually, Morita began to realize that if he were to truly understand the way Americans succeed in the American market, he would have to move there himself.

So in 1963, he took his family of four and moved into an apartment on Fifth Avenue, across from the Metropolitan Museum of Art. Morita and his wife often invited prominent New Yorkers to their new home to socialize, quickly joining the ranks of New York's elite.

Since America is a society comprised of people with various backgrounds, there is little basis on which to judge people. Morita quickly realized that as a result, people are often judged according to their wealth, which was usually quickly determined by their address.

Nearly 20 years after being defeated in World War II, Japan had recovered, but was still poor. Despite these circumstances, however, the vice-president of what had started out as a small, upstart electronics manufacturer from this poor country had managed to move into the classiest neighborhood of New York. While at first a bit of a bluff, it did not take long before Morita felt he truly belonged there on Fifth Avenue.

Several years later, in the midst of Japan's bubble economy, executives of Japanese companies came to occupy some of Manhattan's high-class apartments, but by then, Morita had already been there for over 20 years. He had been like a brave soldier plunging into enemy territory.

By the 1970s, Morita was busy traveling the world, enjoying more recognition for his success in America than in Japan. At that time, Sony America's headquarters were situated in a Manhattan office building commanding a great view. In his office with a panoramic view of Central Park from his window, Morita worked energetically.

No matter how you looked at it, he was now a member of the New York business elite, the splendid office that could overwhelm any visitor.

This outstanding New York office lay in stark contrast to Sony's headquarters in Japan, however, which occupied a renovated factory accessible only after passing through the crowded streets of Gotanda. I remember being astonished by this gap when I first joined the company.

Sony America also had an office in Queens, where Sony's army of salesmen was stationed. It was a different world from that of the Manhattan headquarters, set in a crude building near an overhead subway line, immersed in an atmosphere of confusion. Morita did not hesitate to lavish money on those facilities seen by outsiders, but when it came to those parts of the company that others would not see, he was extremely frugal.

This gap between the lavishness of the international business that Sony represented and the subdued modesty of the electronics manufacturer might have been a reflection of the two contrasting dimensions existing within Morita himself.

The same can be said of Morita's management philosophy. On the surface, he seemed no different from an American manager: smart, energetic and managing from the top down. In fact, however, he was very Japanese.

In the 1980s, by then quite confident, Morita started to expound his own management philosophy to America. This comes through clearly in Made in Japan.

Simply put, Morita thought of his company as a corporate family. Managers and employees share the same fate, and thus, Japanese managers treat their workers as valued collaborators and colleagues. Therefore, once hired, an employee is not easily let go, and greater emphasis is placed on the company's long-term growth than on short-term profit. Employees respond by placing trust in their managers and sacrificing immediate profit for the long-term good of the company.

In contrast, American managers often fire people, think only of short-term profit and do not trust their workers. Employees, in turn, do not trust their managers. The numerous lawsuits and the heavy reliance on legal means of solving problems that arise cause a loss of trust, the result being that only lawyers are trusted in the end.

This was the way Morita contrasted the Japanese management style against the American management style.

At the root of this family-oriented approach to management lies the training that Morita received from an early age, as the eldest son of a sake brewer whose family went back several hundred years in history. The basis of this approach is the idea that the manager thinks first and foremost about his employees, and in return, the employees are loyal to their manager. In a sense, this is a very paternalistic way of thinking: while managers and employees are in a tightly knit relationship, they are by no means equal.

A MAN WITH GENUINE MADE-IN-JAPAN SPIRIT AND WESTERN LEARNING

In Made in Japan, Morita talks about one of his American sales managers for whom he had high hopes, but then suddenly resigned. One day, this sales manager went to Morita's office and said, without any warning, "Mr. Morita, thanks for everything, but I am quitting." Morita couldn't believe his ears. He was embarrassed and embittered and wasn't quite sure what to do. Several months later, he ran into the man at an electronics show where the "traitor" was in a competitor's booth. Morita expected the man to try to avoid him, but instead he came up to him smiling, not seeming the least bit ashamed of what he'd done. Morita was absolutely certain that he did not want this aspect of American-style management introduced into his company.

Doubtless, there are different opinions regarding Morita's old-fashioned Japanese management philosophy. There were people in America who resented what they saw as Morita's heavy-handed and incessant preaching of Japanese management philosophy. Once, at a conference on the East Coast, I saw an economist, who was sitting next to me, frown at Morita as he criticized American management style as if to say, "not again."

Even within Sony, Morita's management style, which places greater importance on building trust and loyalty between people than on the immediate profit of the organization, was criticized. Sony had grown too large for Morita to have with every one of his employees the kind of relationship that had existed between the proprietor and foreman of a sake brewery. No matter what people said, Morita continued to believe in his own theory and put it into practice.

At about the time the book was published, I accompanied Morita to Canada for a conference on copyrights. Despite his busy schedule, Morita managed to squeeze in a visit to Sony Canada, where he ate with the employees there in the company cafeteria. Though these employees were a bit puzzled, Morita was in earnest.

The scene left a big impression on me, as I, personally, was debating whether or not to quit Sony at the time. When I finally did quit, Morita, who seems to have had some hope in me, must have felt the same way toward me as toward that Sony America employee who quit. I still feel guilty about that.

Several years after I left the company, I was asked to interview Morita for Sony's recruiting magazine. He was in great spirits throughout the interview. I couldn't help but wonder why Sony would want to use someone who had quit for their recruiting campaign. Apparently, it was to show that even someone who had quit the company would want to come back to help.

Once again, I was reminded of the way that Morita was always a step ahead of the rest, always making the best of a given situation for the benefit of his company.

If Morita had not succumbed to illness, I wonder how he would react to the present business conditions and employment problems surrounding Japanese companies. He would probably have said things nobody else would have thought of. I wish I could have heard.

Morita, who sometimes had harsh things to say about America, was not the American-style manager that he seemed to be on the surface. When reading Morita's views regarding management, I think of an old phrase: "Japanese spirit, Western learning." Nevertheless, his strong individuality and forward-looking character were well received and liked in America and were major factors in his success.

Morita's ability probably would have led to success, regardless of where he had been. However, one cannot help feeling that he accomplished what he did largely because it was in America that he chose to pursue his dreams. Morita always dreamt dreams and made them come true in America. At the same time, however, Morita was genuinely an old-fashioned man, made in Japan.

2000, Gaiko Forum English Edition